Financial Insights

It's tempting when you pay so many of your bills online to skip on balancing your checkbook. After all, balancing a checkbook is no one's idea of a good time. And with electronic banking now so popular, it's easy for most consumers to quickly check their balances online.

This doesn't mean, though, that it's not important to balance your checkbook on a regular basis. Yes, you can check your balances online if you're a fan of electronic banking. But what if you've forgotten about a check you wrote and it hasn't been cashed yet? You might mistakenly think you have more money in your account than you really have. That can lead to bounced checks and the fees that come with them.

Don't fear, though. Balancing your checkbook isn't as bad a task as it seems. In fact, with some basic bookkeeping abilities, you can quickly and accurately balance your checkbook to make sure that you never accidentally overdraw your account.

Be a good record keeper

Balancing your checkbook all starts with keeping good records. This means that you must keep track of every time you use your debit card to fill up your gas tank, write a check or withdraw $20 in spending money from the local ATM. As soon as possible after making these transactions, write down the amounts in your checkbook ledger. You need to know exactly how much money remains in your checking account if you hope to balance it.

View your monthly bank statement

Before balancing your checkbook, you'll need access to your most recent bank statement. This could be simple if your bank offers online banking and you have eStatements. If you don't have access to electronic banking, you may have to wait a bit longer until your statement arrives in the mail.

What's cleared?

Next, you need to check your checkbook ledger to determine which of your payments haven't yet cleared. For instance, if you mailed a check to your daughter's preschool for $500 and the school hasn't yet cashed it, you'll need to note this when balancing your checkbook. Your account might have $4,000 in it. But you'll need to subtract that $500 preschool payment from this balance to have an accurate record of where you stand financially.

You'll need to do the same if you've made deposits to your checking account that haven't yet been credited to your account. For instance, a client may have sent you $500 through PayPal. Deposits made through PayPal usually take up to three business days to actually get into your checking account. When balancing your checkbook, make sure to account for these deposits, too.

Remember, you don't have to be an accountant to balance your checkbook. You just need to be willing to take a small amount of time on a regular basis -- once a week or once a month, perhaps -- to track the amount of money going into and coming out of your checking account.

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